It is time for the economic development discussion in Wisconsin to shift. We need to move away from a “we tax too much” obsession to a conversation of “we need to attract talent.” Our future depends upon it.
We have made major strides on the tax front. Property taxes are consuming the lowest share of Wisconsin income since 1946 and it appears likely that our total tax burden has fallen out of the top ten among states. But there’s a more important reason to pivot the conversation. Job creators have other things on their mind and Wisconsin has work to do in those areas.
Last week Thumbtack.com released its annual survey of small businesses. Thumbtack quizzed 17,000 business owners about everything from taxes to hiring, using a survey developed in cooperation with the Kauffman Foundation and Bloomberg. First the good news. Wisconsin does well in the area that matters most: helping businesses get the permits they need. Thumbtack gave us an A- for the process of licensing. Those high marks for over-the-counter courtesy moved Wisconsin’s ranking of small business friendliness up from a C in 2014 to a B- this year.
But a B- is not going to light the world on fire. Thumbtack’s survey identifies areas that need improvement. Tax climate is not one of them. Thumbtack said, “Entrepreneurs’ perceptions of their tax burdens were among the least important factors in judging governments.” Small business owners care more about the clarity, courtesy and quickness of government services.
Where do we need to focus? It’s the people part of the equation. Wisconsin earned an “F” in “Ease of Hiring.” Call it a “brain drain,” “workforce under-utilization,” or “an aging demographic,” Wisconsin has a people deficit. Wisconsin’s civic leaders have been talking about this (see Appleton Mayor Tim Hanna’s article in the September Municipality), but the Thumbtack survey drives it home from the perspective of the job-creators. It’s time for an economic development focus aimed at attracting people.
We know how to do it. Tom Still of the Wisconsin Technology Council talked about it at this year’s League of Municipalities workshop for Chief Executives. Stroll through downtown Milwaukee, Madison, Green Bay or Potosi to see how it’s done. City and Village leaders are organizing music festivals, adding downtown art, encouraging mixed-use developments and doing dozens of other unique things to make their community stand out. It’s starting to show results.
The state must help. First, the Legislature needs to give local governments the flexibility to build their community on their own strengths. We have to encourage local control and avoid one-size-fits-nowhere solutions. Next, we need to stop racing to the fiscal bottom. While tax limits and fiscal restraint are important to keep taxes affordable, our goal should be prudence, not poverty. And local control applies to local finances. If the city council approves it and citizens support it by electing or re-electing their city leaders, the Wisconsin Legislature has no business outlawing it. Cool cities cannot be built from the State Capitol.
Wisconsin’s demographic challenge is serious, but it is solvable. A good first step is to shift our focus to what really counts: the people.
Jerry Deschane is the executive director of the League of Wisconsin Municipalities.
